Food business Spring Gully is taking on extra staff to help cope with a boost in sales, as brand loyalty drives a financial revival.

The South Australian pickles and spreads maker went into voluntary administration recently, due to debt of about $3 million.

Managing director Kevin Webb said strong public support and new contracts had boosted the company's prospects and it would now run two shifts per day instead of one, increasing production by up to 50 per cent.

He said three extra full-time staff would be taken on for the next three months.

A first shift each day will operate from 7:00am-3:00pm on two production lines.

The second will be from 2:30pm-10:30pm and run one production line.

Mr Webb said it was a big turnaround from the company's position five weeks ago and appeared to be sustainable.

We were worried about pantry-fill which is a term where people just buy up and fill their pantries and then there's a big gap or lull. But it appears that sales are still going and pantry-fill may not be an issue for us.

Kevin Webb

"We were worried about pantry-fill which is a term where people just buy up and fill their pantries and then there's a big gap or lull," he said.

"But it appears that sales are still going and pantry-fill may not be an issue for us.

"We're trying to get the best deal we can for Spring Gully and its creditors and the role is to get that finalised so that we can put a proposal to the creditors. Having the extra sales is certainly a boost in our ability to raise the right proposal for the creditors."

Mr Webb hoped a slide in the value of the Australian dollar and upgraded machinery at the Dry Creek factory in northern Adelaide would assist a push for exports into Asia and the United States.

"To get ourselves competitive and volumes required for export, we'll need more equipment to make ourselves produce faster," he said.

Spring Gully workers are now flat-out stuffing onions and pickles into jars, just weeks after they were facing the prospect of unemployment.

Pathway to problems

Mr Webb said there were several factors to blame for the financial woes.

"We had a product mix change in our business, we had a sales dip and the high cost of doing business out there in the marketplace all came together," he said.

A decision was taken to hand the fourth-generation family business over to an administrator.

But in a state that one analyst said had lost 30,000 manufacturing jobs since the global financial crisis, something unusual happened: South Australian consumers started emptying store shelves of Spring Gully products.

Its retail sales trebled and the company set about looking for new sales deals with major supermarkets and wholesalers.

"We've got ourselves into a position now through our administrator Austin Taylor where we have more distribution and contracts and the business today has had to announce putting on a second shift, which is quite an unusual event when a company goes into voluntary administration," Mr Webb said.

He said the company previously had been grappling with low margins and the sales drop made the business unsustainable.

"Now with the turnaround and the lift in sales and further distribution [it] gives us the ability to ramp our production volume back up, which is what our business needed," he said.

The forces operating against Spring Gully are pretty powerful. We've seen enormous penetration of international foods and beverages into South Australia and Australia over the last five years, particularly as a result of the high Australian dollar which made importing, particularly of processed foods, very competitive

John Spoehr

John Spoehr, the executive director of the Australian Workplace Innovation and Social Research Centre at Adelaide University, said it had been an interesting case study in brand loyalty.

"What we're seeing play out here is a really high level of brand loyalty. South Australians seem to have rallied behind Spring Gully in ways that hasn't happened with a lot of manufacturing enterprises in South Australia in recent years," he said.

"The Spring Gully situation seems to have captured the imaginations of South Australians who are concerned about the loss of an iconic brand."

But he warned problems could persist.

"The forces operating against Spring Gully are pretty powerful. We've seen enormous penetration of international foods and beverages into South Australia and Australia over the last five years, particularly as a result of the high Australian dollar which made importing, particularly of processed foods, very competitive," he said.

"The large supermarket chains have been taking advantage of the high Australian dollar and that's pushing products like Spring Gully off the shelf to some extent as the generic brands take over and the imported good really make a big difference on the shelves of our major supermarkets."

Spring Gully will not guarantee creditors will be fully reimbursed, but a search is on for investors and Mr Webb is optimistic, as too is a long-time worker at the Dry Creek operation, Maria Dente.

"Now I've got a smile on my face and happy to see things going really good," she said.

The company has until early July to prepare a business case for its creditors.